DailyFX: Analyst picks

ENCY

ENCY STRATEGIST
CHRIS VECCHIO

My pick: Short dollar-yen from ¥97.75
Expertise: Fundamental and technical analysis
Average time frame of trades: A few hours to a few weeks

My long New Zealand dollar-dollar exposure was cut down at $0.8240 from $0.8165 for a modest 0.75 per cent gain, but my attention has shifted into “risk-off” FX positioning amid the US debt debacle. I’m short dollar-yen from ¥97.75 as suggested last week, and seek a breakdown into ¥95.85 at a minimum as risks swell. Aussie dollar-yen is a candidate for a surge lower if US fears continue; a daily close below ¥90.65 would suggest that a near-term top in price formed bringing August lows below ¥87.00 into play.

STRATEGIST
ILYA SPIVAK

My pick: Long Aussie dollar-dollar at $0.9190
Expertise: Global macro
Average time frame of trades: 1 to 6 months

I entered long Aussie dollar-dollar at $0.9190 on 11 August expecting stabilisation in Chinese economic growth expectations to drive improvement in Reserve Bank of Australia policy expectations and spark a corrective rebound. The move is developing as expected, with last week’s close above $0.9405 – a horizontal pivot that has acted as a significant support and resistance since November 2009 – hinting at continued upside ahead. So I will remain short, initially targeting $0.9640. A stop-loss will trigger on a close below $0.8847.

CHIEF STRATEGIST
JOHN KICKLIGHTER

My pick: Long sterling-dollar, dollar-yen, euro-Aussie dollar
Expertise: Fundamental and technical analysis
Average time frame of trades: 1 day to 1 week

The past week was tumultuous as a US government shutdown and delayed non-farm payrolls dampened the market’s ability to establish a clear risk-based bearing. This week will be similarly troubled. A resolution to the government shutdown can stir risk trends and the dollar. Through that, I like sterling-dollar’s reversal as risk holds little sway here. A full scale risk aversion move can leverage dollar-yen major trendline break at ¥97.00. Euro-Aussie dollar is a “risk-on” option should it move below Au$1.4300.